Commerce Dept. May Hike Duty on Chinese Pencils to 53.65%; Punitive Anti-Dumping Action to be Applied Retroactively.

WASHINGTON, D.C.--(BUSINESS WIRE)--July 29, 1996--The United States Department of Commerce has increased the anti-dumping duty rate that may be applicable to imports of Chinese pencils to 53.65 percent, and may apply this increase retroactively to goods imported during 1995.

When the increase is implemented, importers of Chinese pencils, who believed that their anti-dumping liability was fixed, could face substantially higher customs bills on their 1995 importations.

The Commerce action came at the direction of Federal Court Judge R. Kenton Musgrave, who is hearing an appeal of an earlier Commerce Department anti-dumping decision which, U.S. pencil makers contend, was based on a flawed investigation and greatly underestimated the scale of Chinese pencil dumping.

Despite the increase, the domestic pencil industry believes that Commerce continues to understate the extent of Chinese dumping, and has requested the court to direct the Commerce Department to impose even higher duties.

In addition, Commerce reversed its position regarding China First Pencil Company and agreed that the largest Chinese pencil producer was, indeed, dumping pencils in the United States at a rate of 8.60 percent.

Again, domestic pencil makers believe that the Commerce Department's estimate of China First's dumping is too low, and have asked the court to direct Commerce to impose higher anti-dumping duties. This increase may be applied retroactively. The new anti-dumping duties will go into effect upon the resolution of this appeal.

"These Commerce Department decisions are major victories for the pencil industry in the United States," said George Thompson, attorney for the Writing Instrument Manufacturers Association, plaintiff in the Court of International Trade appeal.

"In their action, Commerce has made a bold statement that the unfair trade of Chinese pencils in this country will not be tolerated, and that those who support such unfair practices through the purchase of dumped goods are assuming significant financial liability. In the last three months of fiscal 1994 alone, Commerce collected more than $915,000 in anti-dumping duties from importers of Chinese pencils," Thompson said.

The imposition of duties has proven to be an effective tool in stemming the tide of below-cost Chinese pencils being dumped in the United States. Imports of Chinese pencils, which had jumped from 3.2 million gross in 1992 to 4.7 million gross in 1994, have fallen dramatically to just 1.8 million gross in 1995, according to U.S. Census Bureau Statistics.

"The higher anti-dumping duties imposed by Commerce should further reduce the volume of unfairly traded pencils coming in from China," said Thompson, "and will help create a more level playing field upon which U.S. pencil manufacturers effectively can compete."

For additional information, contact Jean Wilhoit, Executive Director, Incense Cedar Institute at 209/957-6850. The Incense Cedar Institute is a marketing association that promotes the use of domestic Incense-cedar for use in wood-cased pencils.

CONTACT: Incense Cedar Institute

Jean Wilhoit, 209/957-6850